Government Warnings Are Not TakingsPosted: September 23, 2014
Last week, in Dimare Fresh, Inc. v. United States, the U.S. Court of Federal Claims affirmed that, after all, there really are some categorical limits to takings liability. The case arose from a public advisory issued by the Food and Drug Administration identifying certain types of tomatoes as the apparent source of a salmonella outbreak – a link that was ultimately demonstrated not to exist. Tomato producers sued under the Takings Clause seeking just compensation for the economic losses they suffered following collapse of the market for tomatoes as a result of the FDA’s public warning. The claims court, citing a persuasive pile of precedent, dismissed the claim, relying on the following principle: “A regulatory takings claim is not plausible and cannot proceed when the government action at issue has no legal effect on the plaintiff’s property interest. Advisory pronouncements, even those with significant financial impact on the marketplace, are not enough to effect a taking of property under the Fifth Amendment.” Plaintiff’s counsel has vowed an appeal.